Attorneys

Practice Areas

Tax bills for 2013 were recently sent. Taxpayers who wish to challenge their Minnesota property tax liability need to be aware of the filing deadline and other requirements. Under Minnesota law, the filing deadline for a property tax petition is April 30 of the year in which the taxes are payable. For example, any appeal of property taxes assessed in 2012, payable in 2013, must be filed by April 30, 2013.

Taxpayers may be surprised to learn that while their assessed values have dropped, their taxes may have actually increased. Due to widespread cuts in both commercial/industrial and residential valuations, the effective tax rates at which properties are assessed have significantly increased.

Taxpayers should ask these questions:

Is my property overvalued, in excess of its fair market value?Overvaluation is the most frequent basis for bringing a property tax challenge. If the taxing authority has valued your property in excess of its fair market value, you should consider whether to challenge the valuation. In order to convince the taxing authority that the property has been overvalued, you will usually need an appraisal performed by a qualified appraiser that supports your proposed reduced value.

Is my property properly classified?The assessor must classify all property according to its current use. Each class of property, such as single-family residential, apartment, cabin, agricultural, or commercial/industrial, is taxed at a different rate.

Is my property exempt?Properties such as schools, hospitals, churches and purely public charities are generally exempt from taxation. But, there are gray areas under the law. For example, is an assisted-living facility more like a taxable apartment or an exempt nursing home? When do farming activities qualify for the agricultural exemption? The answers can be complex.

Is my property valued higher than other similar properties, such that it is being discriminated against?The Minnesota Constitution requires that not only must a property be assessed at market value, it also must be assessed uniformly with similar properties. A discrimination challenge is established through assessment/sales ratios developed by the Minnesota Department of Revenue. If the ratio for your type of property in your city or county is under 90 percent, you may be entitled to a reduction in the amount of tax payable.

Taxpayers should know that there are many procedural 'traps for the unwary' in filing real property tax appeals:

Not only is the petition required to be filed with the District Court on or before April 30, it must also be served to the county auditor, the county assessor, the county treasurer and the county attorney by that date. Failure to comply with these service requirements will cause the case to be dismissed.

Even though you are challenging the property taxes, those taxes are still due by the May 15 and October 15 deadlines. Failure to pay the taxes on time will cause the case to be dismissed.

For income-producing properties, the taxpayer is statutorily required to produce income and expense information, usually rent rolls and financial documents and other information, to the assessor by August 1, or face dismissal.

The Court has the power to increase the valuation and has used that power when it has found evidence to support a higher value. This is why an owner usually needs an appraisal to effectively evaluate the merits of its appeal.

Owners of property should carefully review their property tax statements before April 30 to determine if they have a valid claim and may wish to seek further assistance if needed.

The Briggs and Morgan Tax group is well-versed in all areas of property tax disputes. We have experience navigating the procedural hurdles, as well as trying cases before the Minnesota Tax Court. For more information, or to review your situation and evaluate applicable property tax strategies, please contact us.